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Workforce in the digital world of Banking

April 23, 2018 - Reghunathan Sukumara Pillai

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When computerization was introduced in the Indian banking industry in the early 1990s, a huge furore ensued amongst the staff in the public sector banks. The banks were heavily unionized at the time and federations/associations predicted loss of jobs especially at the clerical cadre and some even at the officer/middle management level. The rationale? Simple – if the jobs they are engaged in on a daily basis at the branches which include voucher posting, accounting and consolidating the general ledger are being passed on to a computer or machine, they may not be required. Even at the regional/zonal and head office of the banks, there were employees who compiled the MIS by receiving information from different branches associated in a region and they dreaded a potential job threat given the ability of banking software to consolidate the data from any location without dependency on staff at branches. With the addition of ATMs the front office staff /tellers of the bank started worrying about job security.
However, over a period of time, the bank staff realized that computerization increased the number of bank jobs, improved efficiency and automation at braches/head offices, brought more transparency, helped in process improvements and assisted the Management with timely data for decision making. There was minor reskilling required for data entry and branch operations and with the knowledge of banking, such skills were easily acquired as data entry was related to banking processes. Select employees with basic computer knowledge gained proficiency and were able to move up the value chain.
With the extent of success received and potential of technology realized, the Management of many Banks moved ahead with further digitization and computerization while recruiting people with unique skill sets and retaining the existing ones. The phase saw the addition of channel banking – including internet, mobile, other channel offerings. The internet and channel banking reduced the customer foot print at the branch and there was no reduction in the staff strength. On the other side, bank staff were able to utilize more time for customer service and cross selling. Private banking/preferential banking services came into existence which helped customers (though the select ones) to get more personalized attention and have a better banking experience. Instead of customers visiting the branch, their financial needs were addressed by the dedicated relationship managers/private bankers. The financial portfolio of customers widened to a large spectrum of banking and other financial products such as wealth management products. Banks could leverage the situation and evolved as financial advisors managing the entire financial needs of a customer.
Similar to the sentiment expressed in 1990s, today bankers are increasingly worried about software solutions linked to process automation, artificial intelligence, analytics and other IT related activities like infrastructure and managed services moving to separate cloud service provider currently. Compared to the computerization and implementation of software solutions in the past, which was a real necessity of that period, the banks and software vendors are exploring areas for usage of these software components. However, the path and course of this journey for the bank is topsy-turvy and though there are limited successes like chatbots for customer assistance which are used in a few Banks, there is no set pattern or leadership status attained by any bank for others to follow. Process automation has been implemented in many banks earlier but there were limitations and automation will continue to evolve with new tools. But still miles away in the journey to maturity.
While software has been increasingly used as the backbone for digitization, the success of digitization depends on the usage by clients and support provided by the bank staff. In a typical customer journey from Marketing to Sales to Lead Management to Account Origination to Servicing to Support where some of the events could be partially or fully automated, there could be processes which are dependent on the bank staff. The TAT for a manual /semi- automatic process can be reduced, or exceptions can be approved faster with quick decisions and the customer queries can be responded to faster with awareness of software and underlying functions. Customer experience in digital applications plays a critical part for the success/longevity of these services/offerings. With the evolution of technology new innovations are plenty and existing ones are likely to lose steam in the short run.
To conclude, the skill set of the bank staff in the 1990s was one of banking/domain knowledge, book keeping, customer relationship /service, computation of data for MIS, manual accounting – interest postings, non-performing asset (NPA) provisioning etc. With computerization, the skill set moved to computerized banking, process knowledge, relationship management, channel banking and operational efficiency.
Digitization and end-to-end automation are expected to introduce a level of sophistication in the environment for bank staff as well as for the customers, providing a plethora of functions and opportunities to explore on both the sides. Though process automation and introduction of banking robots could potentially replace some of the existing skill sets required, banks can find avenues to effectively utilize man power. More customers can be added to the ‘personalized banking’ platform assuring delightful customer experience and thus increase customer engagement with banks for a mutually beneficial business relationship.
As the complexity of banking products and services increases with ever more focus on digital, the bank staff has to evolve and one needs to learn to service customers with new digital services /solutions and gain sufficient knowledge on the relevant areas in the new environment. Digital products and services can be marketed and sold through the branch staff and existing customers can be serviced better when the staff is aware of the intricacies of these offerings. Though a customer would be pleased to complete the entire process of a financial product life cycle in a hassle free manner the digital way, the personal attention of a bank staff would be necessary to have a meaningful engagement with the customer.
For the banking staff, awareness of analytics, knowledge of banking processes and practices for automation, awareness of digital platforms and technologies and their usage will make an impact in the next decade. However, with the basic banking /process knowledge these traits are not difficult to acquire and work in favor of job retention. 
It can be assumed that in the long run, the banking job will be more lucrative and attractive. It will move away from routine data entry, voucher posting and process practitioners to one that optimally uses analytics and automation for efficient business operations and delightful customer experience.

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